LG ELECTRONICS INDIA PVT. LTD. Vs. ACIT
INCOME TAX APPELLATE TRIBUNAL
Lg Electronics India Pvt. Ltd.
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R.S.Syal, Member (A) -
(1.) THIS appeal by the assessee is directed against the final assessment order passed by the Assessing Officer (AO) on 31.10.2011 for the assessment year 2007 -08.
(2.) GROUND Nos. 1 and 6 are general, which do not require any separate adjudication. Ground No. 7 was not pressed by the ld. AR. Ground No. 14 is premature. These two grounds, therefore, stand dismissed. Ground No. 2 is against making of all the additions to the tune of Rs. 2,26,61,73,676/ - on account of transfer pricing adjustment. This ground simply summaries total of various additions made on account of international transactions, which have also been distinctly challenged item -wise through separate grounds. We will deal with such grounds, one by one, infra.
(3.) GROUND No. 3 is against making of addition towards transfer pricing adjustment amounting to Rs. 1,82,71,11,446/ - in relation to the advertisement, marketing and sales promotion (AMP) expenses. Here, it is pertinent to mention that a Special Bench was constituted on this issue in this very appeal. An order dated 23.1.2013 has since been passed by the Special Bench as LG Electronics Pvt. Ltd. vs. ACIT : (2013) 140 ITD 41 (Del) (SB). Two questions were referred to the Special Bench. The first question has been answered by holding that the transfer pricing adjustment in relation to the AMP expenses incurred by the assessee for creating or improving the marketing intangibles for and on behalf of its foreign associated enterprises, is permissible. The second question as to whether the assessee should have earned a mark -up from its AE in respect of such AMP expenses incurred for and on behalf of the AE, has also been answered by eventually restoring the matter to the file of TPO for de novo adjudication in the light of certain guidelines outlined in the order. Now, this Division Bench is bound by the Special bench decision and cannot tinker or amend the conclusions so drawn, as was argued by the ld. AR in an attempt to persuade us for re -deciding this issue or sending it back to the AO/TPO for a fresh decision as per law. In fact, the Special bench order, passed in this appeal alone, constitutes an integral part of this order. Respectfully following the view taken by the Special Bench, we send the matter back to the TPO/AO for deciding it in accordance with the Special bench verdict. Accordingly, Ground No. 3 is allowed for statistical purposes.;
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